The Facebook-owned app will include a select group of publishers in a test to pay creators, Sara Fischer at Axiosreported this week. The news site also said publishers have grown frustrated that discussions about monetization plans have been delayed from this year to an indefinite period.
Instagram is in the process of determining how to share revenue with creators that develop a following in the app, Axios reported. The app in May had announced it would start selling ads in IGTV, its platform for long-form videos, and work on a revenue-sharing strategy with creators.
That would help the platform to keep pace with Google's YouTube, which for years has split ad revenue with creators, encouraging them to develop content ranging from talk shows to educational videos. YouTube also is a sales juggernaut for Google, with revenue that surged 32% to more than $5 billion in the third quarter from a year earlier. YouTube is on track to easily surpass $20 billion next year.
The growth in video advertising is enticing to social-media apps like Instagram and is likely to affect its collaborations with publishers. Already, there are signs of what kind of content Instagram seeks, such as its collaboration with digital publisher BuzzFeed to create a reality competition show. "BuzzFeed's Show Off," which premieres today on IGTV, will give eight budding content creators a chance to star in a video with popular BuzzFeedpersonalities.
Because Instagram can command higher prices for video ads, the development of IGTV appears to be a bigger priority for parent Facebook than selling display ads among still images in its news feed. However, creating video content isn't a core competency for most publishers, so it's still unclear how they'll participate in other collaborations with Instagram.
While Facebook last year created a news section to aggregate content and pay publishers for their efforts, Instagram doesn't have a comparable feature yet. Helping publishers to monetize their content on Instagram also would give them greater incentive to participate on the platform.